Exciting earnings growth prospects with new contract manufacturing activity should provide the boost for the share price of this pharmaceutical maker in 2004. Analysts said Duopharma had recently started production of Methadone, which is used to treat hard drug addiction. This holds huge earnings enhancement potential, even possibly doubling the group's existing revenue, if the drug is adopted as standard treatment at rehabilitation centres in the country. Duopharma is also believed to be bidding for contracts to supply pharmaceutical products to Papua New Guinea. It is currently the largest maker of small volume injectables in Malaysia.
Englotechs is the only listed local glove maker specialising in cotton and nylon industrial glove production. Sentiments aside, the company’s revenue is expected to grow between 22% and 30% in the next two years, driven by rising demand from overseas clients. In the last five years, turnover growth had averaged around 30% per year. The company had been shifting its manufacturing focus towards higher value-added products, which have resulted in margin increases from a low of 14% in 2000 to 22% now. The second board company also has sufficient reserves to qualify for a transfer to the main board.
THE crown jewel of banking and property group, MPlant, is 100%-owned Alliance Banking group, which contributed 80% to group operating profit. Analysts believe that being one of the smallest banking groups in the country, the company makes an attractive takeover target. Upside valuation for this stock is attractive; based on 1.5 to 2 times net tangible asset (NTA), the share price is valued at RM1.70 to RM2.30. The stock has outperformed the Composite Index for the past three months, hitting RM1.68 in mid-November, its highest level since August 2000.
MIDF has submitted an application to Bank Negara after having reached an agreement to acquire Utama Merchant Bank Bhd, the missing link in MIDF's quest to become a full-fledged investment banking group. Meanwhile, the acquisition of Amanah Capital Partners (ACP), completed in March, has seen net profit for the six months to Sept 30 soaring to RM87.2mil, mainly due to contribution from ACP's bond market activities and robust non-interest income. OSK Research has projected MIDF's net profit to reach RM93.3mil in the shortened financial year ending Dec 31, 2003. The stock is trading at 8.5 times its 2004 earnings and 40% discount to its NTA per share of RM1.92.
Shares in this aluminium alloy rims manufacturer is expected to outperform the broader market, given its superior earnings growth prospects and cheap valuations. Analysts said BSA's foray into higher-end market segment, will help sustain the group’s compounded earnings growth of 20% annually and high margin average of 30% per year. Currently, an estimated 80% of group’s annual production finds its way to the United States, Europe and Australia. Since its listing the group has been expanding its manufacturing capability, while aggressively promoting its brand name.
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